Taxpayers who came out by far the best with the tax legislation which resulted from the recent fiscal cliff negotiations were those whose taxable income was between $200,000 and $500,000.
Thus in this recommendation I am focusing on improving the general price CPI index adjuster that is presently used in the Tax Code related to high income taxpayers.
Most studies have shown that a chained CPI index is more accurate than the CPI, especially as it relates to high income taxpayers.
Thus, my recommendation is that the chained CPI be used instead of the general CPI all throughout the Tax Code to adjust for annual inflation for all high income taxpayers.
For instance, the tax schedule for married filing jointly for 2013 has a tax rate of 36% for taxable income above $217,450 and of 39.6% for taxable income above $388,350. Thus my recommended change would be to adjust these taxable income amounts in all subsequent years by using the chained CPI instead of the general price CPI.
This is a much fairer way to reduce the US Debt then to reduce either the much needed US government social safety net in these times of continuing high unemployment and high underemployment or the wise US Government investments in research, education and energy.
